Spirit AeroSystems is expected to lay off some 400-450 workers at its Wichita, Kansas, facility following a decrease in production rates at Boeing, the company’s largest customer.
The news was initially reported by Wichita-based KSN, which obtained an internal memo stating, “The recent slowdown in the delivery rate on commercial programs compels a reduction to our workforce in Wichita. In the coming weeks, we will inform affected employees. We are committed to implementing this transition in as compassionate a manner as possible.”
Currently, Spirit AeroSystems employs 12,600 workers at its Wichita factory. The company serves as Boeing’s primary supplier of fuselages for the 737 MAX, although deliveries have been significantly slowed following safety concerns, including the Alaska Airlines door plug incident.
According to CNBC, Spirit AeroSystems reported a quarterly loss of $616.7 million for the first three months of the year. The company also noted first-quarter Boeing deliveries were down 31% from the same period last year with overall deliveries down 11.3%.
Meanwhile, Boeing is still in talks to buy Spirit AeroSystems, which it spun off from in 2005.
Isn’t this a direct result of the FAA limiting 737 production in Everett, WA?
I doubt it. The FAA limited how much Boeing would be allowed to INCREASE their production, but Boeing hasn’t even been building at their January rate since February. I’ll guess the slow down in Wichita is a direct result of a slow down in Renton. Expansion to Everett is a whole next level, and that seems farther in the future than just getting Wichita/Renton back on their feet.
Thanks to union seniority more capable workers may go out the door while less capable may remain behind.
Blah, blah, blah.
I’m the head of personnel at Spirit and it’s a non union shop. I’m going to layoff Bill over there because his wife has cancer and it’s costing our self funded medical too much money. There’s Betty, she filed a whistleblower complaint, she’s gone. Henry has been with us for 25 years, a good worker but we are paying him too much, goodbye. Jose is careful and very conscientious but he’s too slow, gone. Eric is an idiot that shouldn’t be anywhere near an assembly line that produces aircraft fuselages, but he’s my friend’s son, so he stays….Is that how it should work Jethro?
Boeing now wants to buy back what they spun off 2005? Brilliant. No wonder they are in financial trouble.
Bean Counter Manager: The FAA has forced us to cut the production rate because of all those quality escapes, but the good news we can cut 500 production line workers and save big on next quarter’s wage bill.
QA manager. Yah but we are going to want to eventually ramp up production so why don’t we keep those guys on to sort out our production line problems now so we are set up for success in the future.
Bean Counter Manager. Yah but that ramp up won’t be for probably in 2 quarters, in the meantime I can juice my bonus with all the savings!
It’s the Jack Welch mindset at work.
Given the current Boeing situation, the best option for Spirit AeroSystems might be to sell to Airbus.
Boeing: Yeah, here’s the thing… We’re cutting Calhoun a big check, so something needs to be done to make the buyback more favorable.
Spirit: No problemo! We got this!
I know! Let’s start with all those who inspect the airframes. All they do is slow things down when we’re trying to make production quotas with fewer workers …